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Greencore has finalised its acquisition of Bakkavor, a significant move that will reshape the landscape of the UK convenience food market. The deal, valued at approximately £1.2 billion, positions the newly formed entity as a leading player with combined revenues nearing £4 billion.
Greencore made its first proposal on 25 February 2025, which Bakkavor’s board rejected two days later. Following this, Greencore then approached the food group with a revised proposal on 7 March, implying a total equity value of £1.14 billion for Bakkavor.
Bakkavor’s board of directors evaluated the proposal with the support of financial advisors and concluded that it ‘significantly undervalued’ the company and its future prospects. The board unanimously rejected the proposal on 10 March and shared its decision in a responding statement filed with the London Stock Exchange on 14 March.
Today (2 April 2025), Bakkavor announced that it would accept Greencore's offer of £1.2 billion.
Under the terms of the agreement, Bakkavor shareholders will receive 85 pence in cash and 0.604 shares of Greencore for each Bakkavor share. This reflects a premium of 32.5% over Bakkavor's closing share price of 151 pence prior to the announcement, highlighting the strategic value perceived by Greencore in this acquisition.
Bakkavor, recognised for its fresh prepared foods, supplies major retailers such as Marks & Spencer, Tesco and Sainsbury, and has a growing presence in international markets, including the US and China. The company reported revenues of £2.3 billion, with a substantial portion generated from its UK operations.
The acquisition is expected to yield substantial synergies, enhancing operational efficiencies across manufacturing, distribution, and supply chain functions. Both companies have highlighted the potential for increased innovation capabilities and improved customer engagement as they combine their resources and expertise.
With the merger, Greencore aims to capitalise on economies of scale, which will support ongoing investment in infrastructure, sustainability initiatives, and automation. The integration of Bakkavor’s operations is anticipated to create a more competitive entity, benefiting consumers and stakeholders alike.
In terms of governance, Agust Gudmundsson and Lydur Gudmundsson, currently non-executive directors of Bakkavor, will join the board of the combined group, ensuring continuity and strategic oversight during the transition.
The completion of this acquisition marks a significant consolidation in the food and beverage manufacturing sector, reflecting broader trends toward scale and efficiency in response to evolving consumer demands and market dynamics.
As the integration process begins, stakeholders are expected to benefit from enhanced market capitalisation and liquidity, alongside a strengthened proposition in the convenience food space.
Image: © Bakkavor